Key changes tack with 'brain exchange' tag

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New Zealand is losing more people to Australia than ever, but Prime Minister John Key is playing down the "brain drain" issue that helped National win the 2008 election, spinning it now in to a "brain exchange".

Speaking at an office opening last week, Key said New Zealanders spend a lot of time worrying about people moving to Australia.

"Yup, we started that debate, but the truth is our population has been rising. At the very minimum you could say it's a ‘brain exchange' because there's quite a lot of bright people arriving into New Zealand," he told staff at Auckland-based Orion Health.

Key said that made New Zealand a better and more exciting place to live.

New Zealand recorded its highest net permanent long-term migration loss to Australia in 2011-12. A record 40,000 net loss resulted from 53,900 people departing, offset by 13,900 arriving.

Total permanent long-term departures in the year were up 5 per cent on 2011, to 87,300, resulting in a net loss of migrants of 4100.

In 2008, while seeking election, Key said he did not think the New Zealand economy could sustain a brain drain of 750 people a week leaving for Australia and about the same leaving for other destinations.

“The brain drain worries the hell out of me,” he told a university audience at the time. "I have no doubt we can kiss goodbye to at least half of you in the next five to 10 years.”

Now, more than 1000 people a week are leaving for Australia.

Labour immigration spokeswoman Darien Fenton said the real question about the "brain exchange" was whether we are actually using skilled migrants. Migrants come to New Zealand with a promise of jobs, but when they get here find it much tougher than they expected. "They may have a qualification, but can't work in those jobs," she said.

Meanwhile, she is seeing more and more firms applying to allow immigrants to take low paying jobs in areas such as age care and hospitality, she said. "We are losing the best and the brightest and bringing in people to work in low paid jobs."

Fenton cited Heinz Watties, which shifted 300 well-paid processing jobs from Australia to New Zealand this year. However, New Zealand workers were contracted at low wages through a labour hire company to do the work.